NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

Corruption and Growth

Measuring Business Cycles

From Efficient Markets Theory to Behavioral Finance

In the era of state socialism under Mao, land in China was treated as a means of production and was allocated administratively by the state free of charge. To accommodate the interests of foreign investors without violating the socialist principle of public ownership, the Chinese state has, since the 1980s, separated land use rights from land ownership and opened up a new market track for the conveyance of land use rights to commercial users. The result has been a distinct dual-track land system in the new political economy, characterized by significant asymmetry for arbitrage. Discrepancy between the state's intention and actual outcome has been a consequence of the internal diversity of power relations concerning land development. Our data analysis reveals that the loss of farmland to nonagricultural developments has slowed down in recent years, that the state's intention to increase land use efficiency has been severely compromised by the socialist legacy, and that illegal activities are perva...

The State, Land System, and Land Development Processes in Contemporary China

This book explains the process of property investment appraisal – estimating both the most likely selling price (market value) and the worth of property investments to individual or groups of investors (investment value).

Valuations are important: they are used as a surrogate for transactions in the construction of investment performance and they influence investors and other market operators when transacting property. Valuations need to be trusted by their clients and valuers therefore need to produce rational and objective solutions.

In a style that makes the theory as well as the practice of valuation accessible to students and practitioners, the authors provide a valuable critique of conventional valuation methods and argue for the adoption of more contemporary cash-flow methods. They explain how such valuation models are constructed and give useful examples throughout.

The UK property investment market has been through periods of both boom and bust since the first edition of this text was produced in 1988 and the book includes examples generated by the different market states: for example, complex reversions, over-rented situations and leasehold examples are in ready supply and are examined fully by the authors. They have retained the book’s basic structure and thrust, setting out fundamental investment and appraisal theory in Part One of the book, but adding a new chapter on building and modelling cash flows as a precursor to the investment material in Part Three.

The heart of the book remains the critical examination of market valuation models addressed in Part Two – it remains the case that no other book addresses this issue in detail.

Property Investment Appraisal

A classic textbook that has guided generations of students through the intricacies of property valuation, The Income Approach to Property Valuation remains a keen favourite amongst students and teachers alike. This new edition has been thoroughly revised and updated to meet the increasingly international perspectives of modern Real Estate students. The links between theory and practice are clearly demonstrated throughout, with a range of new international case studies and practice-based examples. The Income Approach to Property Valuation teaches readers: how to analyse market rents and sales prices to derive market evidence to support an opinion of market value; the investment method of valuation and how it is applied in practice; how specific legal factors can impact on market value when they interfere with market forces; what the market and the profession may consider to be the 'right' methodology in today's market place; and how to use spreadsheets in valuation.

This extensively revised new edition is perfect both for students on Real Estate courses worldwide and for professional candidates working towards their final assessment of professional competence (APC) for the Royal Institution of Chartered Surveyors, needing to demonstrate a valuation competence at levels 2 and 3.

The income approach to property valuation

Part 1 Context: property investment analysis in context cash flow models for property investment analysis depreciation - a new variable a classification of property investment depreciation and obsolescence. Part 2 Analysis: methodology and data an analysis of property investment depreciation and obsolescence - city offices an analysis of property investment depreciation and obsolescence - industrials. Part 3 Models and conclusions: a depreciation-sensitive model for the analysis of property investment.

Property Investment Depreciation and Obsolescence

We study a unique data set in order to examine the performance of a sample of 169 global private equity real estate investment funds across the core, value-add and opportunistic investment style categories over the most recent property cycle (2001-2011). We employ a multi-factor asset pricing model to measure the impact on the funds’ total excess returns of the underlying real estate market, managerial skill measured by Jensen’s alpha, leverage and, for the first time, managerial skill as it relates to timing leverage decisions to anticipated future market trends. We find evidence consistent with the hypotheses that i) fund performance is almost directly proportional to the return on the underlying real estate market, ii) there is evidence for systematic underperformance as measured by Jensen’s alpha, possibly related to market frictions, iii) leverage cannot be viewed as a long-term strategy to enhance performance, and iv) timing leverage choices to the expected future market environment does not appear to add significantly to fund excess returns.

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The Role of Financial Leverage in the Performance of Private Equity Real Estate Funds

There is a substantial literature which suggests that appraisals are smoothed and lag the true level of prices. This study combines a qualitative interview survey of the leading fund manager/owners in the UK and their appraisers with a empirical study of the number of appraisals which change each month within the IPD Monthly Index. The paper concentrates on how the appraisal process operates for commercial property performance measurement purposes. The survey interviews suggest that periodic appraisal services are consolidating in fewer firms and, within these major firms, appraisers adopt different approaches to changing appraisals on a period by period basis, with some wanting hard transaction evidence while others act on "softer' signals. The survey also indicates a seasonal effect with greater effort and information being applied to annual and quarterly appraisals than monthly. The analysis of the appraisals within the Investment Property Databank Monthly Index confirms this effect with around 5% more...

/pdf/appraiser-behaviour-and-appraisal-smoothing-some-qualitative-3ge1x9isiu.pdf

Andrew Baum

Papers

Property Investment Appraisal

The income approach to property valuation

Property Investment Depreciation and Obsolescence

The Role of Financial Leverage in the Performance of Private Equity Real Estate Funds

Appraiser behaviour and appraisal smoothing: some qualitative and quantitative evidence